I was at a conference for VCs today, at which the closing speaker was Harvard Professor Kenneth Rogoff. He previously served as head economist at the IMF, among many other luminous positions. Rogoff also was a professional chess player. Pretty neat.

He spoke about the worldwide economic stagnation and looked at potential root causes. Is innovation slowing? Are demographics the cause? Too much regulation?

His analysis was that the current anemic job growth worldwide is the natural result of a credit boom and bust cycle.  In fact, he analyzed eight centuries’ worth of financial crises and concluded that there is a fairly predictable pattern: economies take on too much debt, things hit a tipping point, markets collapse, and it then takes about five to six years of stagnation before things improve.

I thought it was a very interesting talk.

Our nation has gone a bit guardrail to guardrail on elections recently. People tend to vote depending on their perceptions of their economic prospects. If they feel good about the economy, they’ll re-up with the current political party. If they don’t, they go for the other one. So, we’ve been swinging from the GOP to the Democrats and back again.

The good news is that it is now six years after the 2008 crisis. So, I hope Prof. Rogoff is right. Hopefully, light is at the end of the tunnel.